The State Duma Committee on International Affairs at a meeting on July 19 recommended ratifying Protocol No. 2 to the Russian-Hungarian Agreement on the provision of a state loan to the Government of Hungary to finance the construction of the Paks-2 nuclear power plant.
The protocol was signed by the Russian side in Moscow on July 11, and by the Hungarian colleagues in Budapest on July 12. It implies the provision of a deferral of accrued interest for a loan for the construction of nuclear power plants. Loan payments must be made in euros from the account of the Hungarian side in a Russian bank.
As recalled in the explanatory note, in accordance with the basic Agreement dated March 28, 2014, Hungary was granted a state export credit in the amount of up to 10 billion euros to finance the construction of two power units of the Paks nuclear power plant. Until February 2022, the debtor fulfilled its payment obligations in a timely manner and in full, using the right to early repayment of the debt. As of July 1, 2023, the Hungarian side used the loan proceeds in the amount of about 348.55 million euros, the balance of Hungary’s principal debt is about 28.15 million euros, taking into account partial early repayment of the loan in the total amount of about 320.40 million euros, carried out by the borrower in the period 2018 – 2021.
“In connection with the unilateral restrictive measures introduced by the US and the EU in February 2022 against Russia and, as a result, the inability of the Russian Federation to receive payments from debtor countries, including Hungary, in US dollars and euros, the Russian Ministry of Finance held a series of bilateral consultations with the Hungarian Ministry of Finance with the participation of the Russian contractor and the Hungarian customer to agree on new conditions and procedures for the fulfillment by the Hungarian side of its payment obligations to Russia under the Agreement,” the accompanying documents say.
At present, the only nuclear power plant in Hungary, Paks, generates almost half of the country’s electricity needs from four power units. At the end of 2014, Russia and Hungary signed documents on the construction at the Paks NPP of new power units No. 5 and No. 6 with reactor plants according to the advanced Russian VVER-1200 project, which meets the most modern standards of reliability and safety. With the commissioning of two new NPP units, this share is expected to double.
At the end of August 2022, Hungary issued a license to Rosatom for the construction of power units of the Paks-2 NPP. The start of construction of the Paks-2 nuclear power plant is expected in the spring-summer of 2024, Gergely Guiyash, head of the administration of Hungarian Prime Minister Viktor Orban, said in early July.